Piet van Immerzeel and Strat Pohl v Santam Limited

The appellants, practising as a partnership of consulting engineers, held successive professional indemnity insurance policies issued by insurers led by Santam Limited. The 1991 policy applied from 1 March 1991 to 29 February 1992 and the 1993 policy from 1 March 1993 to 28 February 1994. In May 1991 the appellants became aware that Samancor Limited alleged that defects in a water pipeline might be due to inadequate supervision by the appellants. On 4 June 1991 the appellants notified the insurer, in terms of condition 2(b) of the 1991 policy, of a possible future claim. In November 1993 Samancor instituted formal action against the appellants for breach of contract and negligence. Judgment was ultimately granted against the appellants. Santam contended that the claim was deemed to have been made under the 1991 policy due to the earlier notification, limiting indemnity to R1 000 000 inclusive of costs. The appellants argued that the Samancor action constituted a claim first made during the period of the 1993 policy, which provided more extensive cover.

The appeal succeeded with costs. The order of the High Court was set aside and replaced with an order directing the respondent to pay the appellants R1 000 000 together with interest at 15.5% per annum from 30 June 1998, plus costs.

The case is a leading South African authority on the interpretation of 'claims-made' professional indemnity insurance policies. It clarifies the distinction between a notification of circumstances and an actual claim, confirming that only a demand or assertion of liability constitutes a claim. The judgment provides important guidance for insurers and insured professionals on policy wording, notification provisions, and the scope of cover across successive insurance periods.